​China leads ‘historic step’ to Asia-Pacific free trade

World leaders take their seats as China's President Xi Jinping (C) prepares to deliver opening remarks at the Asia-Pacific Economic Cooperation (APEC) leaders' meeting at the International Convention Center at Yanqi Lake in Beijing, November 11, 2014 (Reuters / Pablo Martinez Monsivais) / Reuters

APEC members have adopted a roadmap for an Asia-Pacific free trade zone that will eliminate trade barriers across 21 countries and could challenge US dominance in the region.

The decision is "a historic step” towards implementing
the idea of the Free Trade Area of the Asia-Pacific (FTAAP),
Chinese President Xi Jinping said Tuesday at the APEC news
conference.

The organization will conduct a two-year study into establishing
the FTAAP.

It is the first time Beijing has taken the lead in promoting a
multinational trade agreement, eight years after the idea was
first proposed.

Throughout the forum, Xi Jinping emphasized the growing power of
China, which is planning to spend tens of billions of dollars on
building overseas infrastructure along key trade routes.

US President Barack Obama welcomed the initiative of a free trade
deal a day after he hailed the separate US-led Trans-Pacific
partnership (TPP) that doesn’t include China or Russia. In an
interview to XInhua news agency he denied speculation that the TPP is a way of
containing Chinese influence.

The pact includes 12
countries in the Asia-Pacific region, and has been negotiated
mostly in secret. WikiLeaks published a draft version of the
negotiating document. The details were criticized by some experts
who said it would violate intellectual property protection,
environmental regulations, and curb freedom of speech.

China’s response to US ‘signal’

“On TPP, China is the only country [among world’s top 3 –
Ed.] excluded,” Liu Feitao, Deputy Director of the American
Studies Department of the China Institute of International
Studies in Beijing, toldBloomberg.“Chinese see the signal from that
action.”

At the summit China signed a number of trade deals that point to
China’s attempt to curb the US dominance in the region.

Agreements on settlements in local currencies marked another
challenge to the US dollar in global finance.

On Monday the Chinese and Malaysian central banks signed a deal
to establish a yuan clearing bank to be based in Kuala Lumpur.
This is first bank of its kind for the country, the People's Bank
of China said. The clearing bank for business deals in domestic
currencies - Chinese Renminbi (RMB) and Malaysian Ringgit - will
bolster Malaysia’s position as a gateway for RMB flows in
Southeast Asia.

The leaders of China and South Korea also reached an agreement on
a free trade deal removing tariffs on 90 percent of goods. That
would allow Korean firms broader access to China’s market.

In October China launched the Asian Infrastructure Investment
Bank a rival to the World Bank and ADB.